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A lot of times, I actually find when people have a plan that tells them, “Hey, you could retire today and and all forecasts are for sustained financial confidence.” They’re like, “You know what? My job isn’t actually as bad as I thought.” And they continue showing up and they’re just happier to be there. They don’t They don’t want to quit. Peter, good to see you. Welcome back, everyone. We are going to dive into the headlines today. Peter, I think this is
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really interesting. We’re going to talk about how more and more older adults are un-retiring to keep up with the cost of living. So, according to a new survey from AARP, more retirees are heading back to work. In the past 6 months, 7% of retirees have re-entered the labor force, up from 6% who said the same in 20 of 25. What does this increase tell you about how fragile many retirement plans actually are? Well, I I I think it does indicate that and I I think unfortunately that number is probably going to continue to
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increase as people realize how expensive retirement is, how long retirement can be, and those expenses keep getting more expensive with inflation. And over 40% of the American public retires with just Social Security alone as their only source of financial means of as their only source of income with no other personal savings or invest invest investments. And so, you know, when when we don’t have that fall back to cover for when life gets more expensive, which it of course does over time, then we’ve
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got necessities and we’re forced into kind of that that that choice. It’s It’s a situation of either significantly cut lifestyle and expenses. And there’s only so many things you can can cut or try to go back into the workforce. Mhm. So, just to share a few more stats with you, Nearly half of unretirees, 48%, say they return to work because of financial necessity or a poor economic outlook. And 41% of older workers say daily living costs were their biggest motivation. So, Peter, how do you stress
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test retirement income plans for inflation so clients are not forced back into work? Well, first I think it’s ironic how all of those numbers are are in line with the percentage of people who are retiring on just social security. Again, all in the 40% zone there. Um but if we don’t want to face this uh as a non-choice, as as something that we have to uh do in in retirement is unretire. If we don’t want to have that inevitable kind of decision to make, then we have to build inflation into the plan, meaning
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you have to have other pockets of money, other investments to fall back on, and to kick on additional income streams when life does get more expensive. We want to have a baseline to cover our expenses on day one of retirement, but in reality, the first year or two of retirement maybe are a little bit more expensive because we’re doing all those things that we thought retirement was going to be about, but those first few years are probably our least expensive years as inflation and all of the things
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that we have to add to the budget get added in, cuz it’s not just the things that we buy today getting more expensive. It is all of the additional expenses that we’re going to end up incurring over the next 15, 25 years. If I look back 15 or 25 years, there’s an incredible number of things in my budget today that were not even thoughts on my radar 10 or 15 years ago, and that’s going to continue into the future. And comfort and convenience cost money. And then at a certain point in time, yes,
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maybe activity wanes a little bit, and we enter those slow go years as they’ve been been called but additional expenses creep in medical expenses and and and things that we used to be able to do for ourselves that we’re no longer able to do for ourselves that we have to hire someone in to do and I’m talking about you know simple things like yard maintenance and upkeep and and fixing things around the house. Then you talk about medical expenses and things get astronomically more expensive. So
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Yeah, we we’ve got a plan for this and we should have this plan in the years before we retire not figure all of this out in the years after we retire. So that’s where where we really stress as we put together the optimized retirement plan for our clients at Roshan Planning that we’ve got some income baseline that we’ve examined carefully that we know and feel confident is going to cover our our living expenses and our quality of life the things that we have become accustomed to and that we’ve got some
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additional discretionary money in the background growing for this very issue. Right. We want work to be an option not a necessity. Yes. Uh yeah, absolutely. And that actually brings me to my next question because you know, we’ve talked through the financial reasons but surprisingly enough 15% of people who un-retired said boredom was the main reason. 14% said it was to stay active. So how do you help clients distinguish between choosing to work versus needing to work and how does that difference
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change their retirement income plan and withdrawal strategies? Well, I think the finances are going to pretty pretty clearly indicate the difference between a need to work versus just a a want to work. There are a lot of people actually that I find retirement’s not for everyone and they do get bored and they want that social interaction and they want that activity and they just want to get out of the house and and and do something to to pass the time. That’s fantastic when it is a choice. When it
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is a necessity, that’s when we run into issues that that they probably could have planned ahead of time and if not avoided, at least foreseen that and and then planned appropriately for that. It’s a lot easier to work an extra couple years while you’re in that routine, while you’re healthy and capable and able-bodied than to spend five or 10 years in retirement and figure out only after that time that oh, I’ve got to do something and go back to work. That that becomes a much more
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difficult conversation and realization. Right. And one of those difficult topics of conversation, 67% of older workers say it would be difficult to find a new job today citing age discrimination and health issues. So, from a planning perspective, how dangerous is it for retirees to assume they can simply go back to work if markets fall or expenses rise? Yeah, I think it’s exceedingly difficult and I’m surprised the number is actually that low at 67%. I mean, there are plenty of professions that
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require some element of of physicality or fitness or well-being. There are some that do not allow employment past a certain age. You know, ageism is a real thing and and there definitely are some hindrances once you’re past a certain point of trying to jump back into the workforce. Also, companies are looking to hire people you know, that are going to stick around for a while. If they’re putting the investment into hiring and bringing somebody on board and training them, they want that person to be there
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for a while and you know, they’re not looking for for just a a six-month one-year stint. They’re looking for employees that when they invest in them can return that investment to to the company. So, yeah, I think that 67% I’m I’m I’m surprised it is that low that uh people are saying it’s difficult to get back into the workforce and I I think um age and physical capability, um mental acuity, all all of those things play into that and you know, at some points probably they shouldn’t, at some points
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I I completely understand when they do. So, it’s just I think that it is dangerous to think, well, I’m going to take 5 years retire and then I’ll be able to just go out and find a job. Um we again, we want to plan this out well in advance. 5, 10 years before retirement, we want to be having these conversations to avoid the necessity of having them 5 or 10 years into retirement. Absolutely. We always want retirement to be work optional. If you are bored, then do something you’re passionate about, right?
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>> And and and plenty of people rewire rather than retire. Like they they they stop doing what they have to do and they start doing what they want to do. Right. And and and a lot of times I actually find when people have a plan that tells them, hey, you could retire today and and all forecasts are for sustained financial confidence, they’re like, you know what? My job isn’t actually as bad as I thought and they continue showing up and they’re just happier to be there. They don’t they don’t want to quit quite
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as as much as they did before they had that kind of capability to do so. So, again, have these conversations in advance. That’s what we try to do at at Resilient Planning is give our clients the confidence where work is optional, uh but if you if you’d like that someday to start today, it could as well. You’ve got the confidence in the plan. Mhm. And how can people get a hold of you, Peter, to have that conversation? Yeah, give me a call to to just start start the conversation to to have a chat and we’ll
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talk over your situation, where you’re at, where you want to be in the future, what are your goals, uh what do you envision retirement to look like for you, and we will put together what we call the optimized retirement plan. And it looks at income, investments, taxes, health care, legacy, brings all of those pieces to the puzzle together so that you have a plan, a document in your hands that you can refer back to and say, “Well, here’s where I’m at, here’s what I want to get to, and here’s how my
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money and my investments are helping me achieve those goals.” Mhm. All right, Peter, thank you so much for your time today. I appreciate it. Always a pleasure, Anne. Thank you. Hey folks, Peter Resnick here with Resnick Planning. So glad that you are enjoying the podcast Planning Matters Radio. You know, one of the tools that we’ve put out there that people really seem to appreciate and really are are finding of value is at 919retired.com. It is your retirement tax bill calculator. If you’ve got any kind of
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retirement account, your tax-deferred 401k or IRA, this is the website, this is the resource where you can go, you can plug in your own numbers, your information, you can slide the the the tool calculator up and down for your tax rate or your amount of savings, and see what your tax bill is likely to be if you default and defer to the IRS’s plan versus what you could potentially bring that tax bill down to. A lot of times, it is a very significant savings. So, if you have not yet, go to the website
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919retired.com, run your numbers on the retirement tax bill calculator. This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to seek investment, tax, or legal advice from an independent professional advisor. Any investment and/or investment strategies mentioned involve risk, including the possible loss of principal. Advisory services offered through Brookstone
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